No Defense

Continued Senate leadership obstinacy delays a key Defense bill, hurts troops, and undermines recruiting, retention, and readiness.

It’s hard to believe or defend that, several weeks into FY 2006 — in wartime, yet — the Senate was entering its fourth month without an inch of movement on the FY 2006 Defense Authorization Bill (S. 1042).

Frustrated by this intolerable lack of action, the members of the Senate Armed Services Committee signed a unanimous letter to Senate Majority Leader Bill Frist (R-Tenn.) and Minority Leader Harry Reid (D-Nev.) with this simple message: Find a way to get the defense bill done.

“This bill was unanimously reported out of our committee more than four months ago,” reads the letter, authored by Committee Chair John Warner (R-Va.) and Ranking Minority Member Carl Levin (D-Mich.) and signed by all 22 other Armed Services committee members.

“We ask for your continuing support to have our bill called up as a free-standing measure before the end of the First Session of the 109th Congress. We, together with every other senator, owe no less than to perform our duty to the brave men and women of our Armed Forces for whom this bill reflects the support of the United States Congress.”

Days before this column went to press, Reid agreed to an unprecedented demand to limit amendments to the defense bill, allowing only 12 amendments for Republicans and 12 for Democrats and agreeing to limit amendments to topics within the purview of the Armed Services Committee in the interests of expediting action. This is a radical departure from past years, when the Senate managed to deal with hundreds of amendments without any such limitations.

Frist responded with a plan that would also require mutual leadership agreement on the topics of all 24 amendments — in effect asking for a unilateral veto on each other’s proposed amendments.

In MOAA’s view, this is an abrogation of leadership responsibility to do the nation’s business in an expeditious and democratic fashion. And when that business is providing for the national defense when the country is at war, it’s politics at its worst.

The Frist plan, for example, would preclude consideration of Sen. Bill Nelson’s (D-Fla.) amendment to end the deduction of VA survivor benefits from Survivor Benefit Plan (SBP) annuities and implement 30-year paid-up SBP coverage as of Oct. 1, 2005. It would also preclude consideration of Reid’s amendment to pay full, immediate concurrent receipt to members rated by the VA as “unemployable.” Both of these amendments are opposed by the administration and would be denied if the opposing party could bar them from ever coming up.

If this arrangement had been in place in previous years, we’d never have won our major Senate victories on concurrent receipt in 2003 and SBP in 2004, because the amendments that led to the victories would never have been allowed.

Even more important, this continued political haggling stymies new legislative authorities that are badly needed to improve recruiting, retention, and warfighting capabilities of our men and women in uniform. Key provisions of this bill include a 20,000-person increase in Army end strength; a doubling of the maximum enlistment bonus; major new accession, affiliation, and reenlistment bonus authorities; and health coverage for Selected Reserve members and families.

The administration opposes the latter fix, but in MOAA’s visits to more than 20 state National Guard adjutants general, these leaders universally cited this health coverage as a key recruiting and retention need.

MOAA President Vice Adm. Norb Ryan Jr., USN-Ret., signed a letter to all members of the Senate on Oct. 24, urging them to press their leaders to put first things first.

“We are already several weeks into the new fiscal year, and weeks more will be required to complete conference negotiations following Senate passage,” wrote Ryan in his letter.

“Every day that this vital legislation is delayed is another day the Army, the Army National Guard, and the Army Reserve are denied the tools they need to achieve their manpower goals.

“It’s time for action, not further political haggling, on a bill that’s this important to national defense.”

Katrina Victim?

House leaders: Cut Defense budget to fund hurricane needs.

Talk about misguided priorities. House Budget Chairman Jim Nussle (R-Iowa), prodded by budget hawks within his party, developed a revised budget package that envisions a 2 percent across-the-board spending cut in every department — including the defense and homeland security budgets — to pay the cost of Hurricane Katrina cleanup.

Has Congress forgotten the country is at war?

This wasn’t some crackpot proposing this. It’s the senior budget planner in the House of Representatives and a key member of the House leadership.

Fortunately, some other House leaders recognize just how bad an idea this would be. Armed Services Committee Chairman Duncan Hunter (R-Calif.) and Homeland Security Committee Chairman Peter King (R-N.Y.) blasted the plan and said they’d fight hard against any defense and homeland security spending cuts when the country is fighting a war on terrorism both abroad and at home.

As this issue went to press, House leaders couldn’t get a consensus on imposing an across-the-board budget cut to pay for Hurricane Katrina cleanup. But a spokesman for House Speaker Dennis Hastert (R-Ill.) indicated that an across-the-board cut is still part of the leadership plan.

In MOAA’s view, a Congress that would cut the Defense budget in wartime has lost its bearings on budget priorities.

Senate leaders are shooting for a more modest budget cut package and are having a hard time building a plan that will satisfy the various factions.

At press time, Senate leaders were closer to getting a deal on their savings measure, but the differences between the two spending reduction initiatives may make it difficult for the two chambers to come to an agreement on a final bill.

COLA Iced

The 2006 COLA is the largest in 15 years.

The Bureau of Labor Statistics reported in mid-October that recent jumps in energy prices boosted the Consumer Price Index another 1.5 percent in September.

That resulted in a 4.1 percent COLA based on the increase in average costs from the third quarter of 2004 to the third quarter of 2005. This 4.1 percent increase will be applied (in most cases) to military retired pay, Social Security, Survivor Benefit Plan (SBP) annuities, and veterans’ disability compensation as of Dec. 1, 2005. The increases will appear in January 2006 paychecks. This is the largest COLA since the 1991 increase of 5.4 percent.

Newly retiring members receive a somewhat smaller, partial COLA for the year of their retirement, because they already received a January military pay raise (which also raised their retired pay) during their retirement year. Members retiring in 2005 will receive one of the corresponding COLAs below based on their year of entrance and date of retirement.

• Members who entered service before Sept. 8, 1980, and retired on or after Jan. 1, 2005, will receive a 3.4 percent COLA.
   
• Members who entered service on or after Sept. 8, 1980 (whose retired pay is calculated on their highest 36 months’ basic pay rather than final basic pay), and retired between Jan. 1, 2005, and Sept. 30, 2005, will receive a partial COLA based on the calendar quarter in which they retired. Those retiring in the first quarter of calendar year 2005 will receive 3.4 percent; in the second quarter, 2.8 percent; and in the third quarter, 1.4 percent. Those who retire after Oct. 1, 2005 (fourth quarter), will see no COLA this year.

Members retired during 2005 will receive full-year COLAs in future years.

While some may like the bigger retired pay increase, the big jump in inflation only means that living expenses already have gone up more rapidly than usual, so retired pay, Social Security, SBP, and other annuities have to chase those expenses after the fact. Given a choice, we’d prefer lower inflation and the resultant lower COLAs.

Commission Wants More Time

Longer-term disability research may slow concurrent receipt expansion.

Veterans Disability Benefits Commission meeting of Oct. 14 focused on preparation of two contracts for research work by the Institute of Medicine (IOM) and the Center of Naval Analysis (CNA) that are expected to take 15 to 18 months to complete.

The IOM study will address medical aspects of the disability evaluation process, examining the details and utility of the VA’s disability rating schedule and possible changes to the criteria and methodology for making “presumptive” service-connected disability determinations.

The CNA will provide a comprehensive analysis of disability and survivor benefits, including surveys of disabled veterans and survivors and analysis of the personal and financial impacts of service-connected disabilities.

Based on the studies’ timelines, the commission plans to ask Congress for a one-year extension to its August 2006 final report deadline. An extension is nearly unavoidable given the daunting scope of their review.

If Congress accepts the commission’s revised timetable as expected, it will further extend an already protracted debate on further action to fully eliminate the deduction of VA disability compensation from military members’ earned retired pay.

MOAA believes the commission is sincere in its efforts to complete a full and fair review of this important area. We’re heartened by the commission’s votes to reject proposals aimed at considering a veteran’s genetic makeup in disability determinations or reducing disability benefits at some “normal” retirement age.

But we’re not anxious to see it go on any longer than absolutely necessary, and we don’t intend to defer efforts to make further progress in eliminating obvious inequities under the current disability offset law.

DACMC Eyes ‘Reforms’

Committee to defer benefit change specifics to 2006 review group.

The Defense Advisory Committee on Military Compensation (DACMC) met in late September to discuss issues for potential inclusion in its interim report to the secretary of Defense. DACMC was appointed by the secretary to make recommendations for adjusting the philosophy and mechanics of military compensation programs. In earlier meetings, DACMC heard inputs from representatives from DoD and the services, government agencies and consultants, and military associations (including MOAA).

The meeting opened with a staff presentation on how to assess “fairness” as it relates to proposed changes to the current DoD compensation system. DACMC members agreed that fairness should be included as one of its guiding principles.

In subsequent discussion, the committee discussed several possible options, including:

• allowing additional retirement credit for service beyond 30 years,
• exploring government matching of members’ contributions to the Thrift Savings Plan (TSP
• investigating earlier vesting of retirement benefits,
• delaying the point at which retirement annuities are payable,
• encouraging longer careers for those with unique skills,
• increasing health care enrollment fees annually based on increases in retired pay,
• consolidation of some special and incentive pays, and
• modifying mandatory retirement rules for specific specialties.

DACMC Chairman Adm. Donald Pilling, USN-Ret., stated that these issues are under review and not ready for any specific recommendation. He said the concepts ultimately recommended by DACMC will be turned over to the next Quadrennial Review of Military Compensation (QRMC) for consideration when that group convenes next year. Additionally, he reiterated the committee’s intent that any major changes would not affect anyone already serving, but would apply only to future entrants.

DACMC’s published guidelines are that any changes must:

• be viewed as fair to the current force;
• have aspects that appeal to force managers, force members, and Congress;
• provide the incentive structure to meet all-volunteer force readiness goals; and
• be at least resource neutral.

Many past compensation studies have foundered because of the extraordinary difficulty of meeting such competing objectives. For example, putting more money into vesting or TSP government matching would require substantially larger payments to separating members who currently receive none. Under a revenue-neutral requirement, that would have to be funded by reducing retirement compensation for members who serve a career. But taking money from people who stay to pay people who leave is hardly a formula for meeting long-term retention and readiness needs.

At the time this column was prepared to go to press, the next DACMC meeting had not been announced but was expected to be in November.

Rx Help Is Here

New MOAA brochure helps beneficiaries, providers navigate pharmacy benefit.

Enclosed with this magazine you’ll find your latest MOAA member benefit: our new pharmacy brochure, “Navigating the TRICARE Pharmacy Program: A Guide for Beneficiaries and Providers.”

Although the military pharmacy benefit provides terrific value, it can be complicated, with multiple copayment tiers, different policies for different classes of drugs, different rules for people with other health insurance, and special authorization requirements for some medications.

If you’ve ever wondered, “Will TRICARE cover the drug I need?” or “What does my doctor have to do to prescribe me a brand-name drug if the generic doesn’t work for me?” or “What will TRICARE pay if I have partial drug coverage through my civilian employer?” or simply, “Where can I get help if the system seems to have broken down?” then this brochure is for you.

It provides practical, easy-to-read advice on how to make the most cost-effective use of your drug benefit, how to minimize red tape, and how and where to get help if you experience any problems. You’ll want to tuck it away for future reference on any pharmacy questions you may have.

We’re pleased to provide you this valuable brochure as a free MOAA member service. It’s available to nonmembers for $7.95.

Cutback Relief for Medicare, TRICARE?

Congress mulls reversing 4.3 percent payment cut planned for 2006.

MOAA and The Military Coalition, working with the American Medical Association (AMA) and others, have been pressing Congress all year to change the law that is now scheduled to cut Medicare physician payment rates by 4.3 percent on Jan. 1, 2006, with further cuts planned in future years. Because TRICARE payment rates are linked to Medicare’s, the same cuts would apply to TRICARE providers.

Hill leaders acknowledge that the current payment-setting formula is flawed and want to fix it, but budget restrictions, hurricane relief needs, and other funding issues impose competing priorities.

As this article went to press, Senate Finance Committee Chairman Charles Grassley (R-Iowa) was proposing to eliminate the 2006 rate cut and substitute a 1-percent payment increase. The 2005 Medicare Trustees Report projects physician practice cost inflation for 2006 will be 2.7 percent.

MOAA believes we need a law change to set physician payments at a level that keeps up with their rising costs of medical practice. The current payment formula cuts payments to doctors when the economy worsens, regardless of what’s happening to physicians’ costs.

AMA surveys indicate that, if Medicare payments were to decline, more than a third (38 percent) of physicians would reduce the number of new Medicare patients they accept. A survey earlier this year found that 22 percent of Medicare patients already had trouble getting an appointment with a new primary care physician.

Many military beneficiaries face even greater problems finding providers who will accept TRICARE patients, especially in areas where there is not a large military population.

MOAA thinks Congress will reject the rate cut, as it has done for the last two years. But exactly what will be done is far from certain.

To preserve patient access to providers for the long term, we need legislation such as H.R. 2356 (sponsored by Rep. E. Clay Shaw, R-Fla.), which would change the statutory reimbursement formula to reflect changes in physicians’ actual practice costs.

Probing TRICARE

Subcommittee grills DoD leaders, contractors on program cost, access issues.

In an October hearing, the House Armed Services Personnel Subcommittee received inputs on military health care from Assistant Secretary of Defense (Health Affairs) William Winkenwerder, the three regional TRICARE contractor CEOs, and the service surgeons general.

The subcommittee members wanted updates on beneficiary access to providers, rising government health care costs, and reimbursement rates TRICARE pays to providers.

Winkenwerder expressed his concern for the sustainability of rising health care costs, especially for retirees, claiming that retiree care would take 75 percent of the defense health budget by 2009. He also noted that TRICARE annual fees have never increased, in contrast with trends in the private sector. He asked Congress not to rule out private sector fixes to military health care issues but said DoD has no specific proposals at present.

Winkenwerder said TRICARE rates are tied to Medicare’s and so TRICARE pays “about the same” as Medicare. When one committee member insisted that TRICARE pays less than Medicare in some cases, Winkenwerder said he would recheck if that does happen.

CEOs of the three regional TRICARE contractors testified that the TRICARE Prime provider networks are growing and beneficiary access to providers continues to improve with time.

Subcommittee Chair John McHugh (R-N.Y.) ran into the same problems MOAA has had in getting answers to some of his specific questions. His opening remarks indicated his interest in TRICARE Standard access issues, but DoD officials’ and contractors’ answers focused mostly on TRICARE Prime, which has far fewer problems.

Asked what they could do to encourage more providers to accept TRICARE patients, the contractor CEOs said increasing reimbursement rates would help but eliminating TRICARE “hassle factors” would be even more important. They said TRICARE requires some outdated practices that are seldom used in the private sector and discourage provider participation.

This is a hot topic for MOAA. We’ve been working and will continue to work with the Armed Services committees to expand provider participation and improve beneficiary access.

House Slams PTSD Review

Subcommittee members challenge VA plan to check thousands of PTSD ratings.

At a mid-October House Veterans’ Affairs Disability Assistance and Memorial Affairs Subcommittee hearing on disability claims, legislators criticized the ongoing VA review of 72,000 PTSD claims, describing it as potentially illegal and calling for an immediate halt.

Chairman Jeff Miller’s (R-Fla.) subcommittee heard testimony from the VA Inspector General and the Government Accountability Office. New Mexico Secretary of Veterans’ Services John Garcia followed, with a final panel of three other VA leaders.

Garcia described how the review contributed to the suicide of a New Mexico Vietnam veteran and Purple Heart recipient. He said VA’s PTSD review is seen as a personal assault on combat veterans’ honorable service.

Rep. Shelley Berkley (D-Nev.) strongly criticized the review, saying, “Mental health professionals [and] veterans’ advocates tell us that this review, which forces some veterans to revisit their traumatic experiences and increase their psychiatric symptoms, is ‘madness.’ ” Rep. Tom Udall (D-N.M.) echoed Berkley’s concerns and asked the VA leaders to stop the PTSD review now, before more harm is done.

MOAA couldn’t agree more. This insensitive review plan sends the wrong message when thousands of returning combat veterans and their families are suffering PTSD’s traumatic effects. The Pentagon and Congress are trying to destigmatize this debilitating disease so more victims will seek treatment. But that cause is undermined if VA-recognized PTSD victims are subjected to repeated grilling on whether they deserve compensation.

DACOWITS vs. USFSPA?

Former-spouse reform advocate pushes women’s group for action.

Encouraged by MOAA and others, Uniformed Services Former Spouse Protection Act (USFSPA) victim Lt. Col. Patricia Larabee, USA, took her case to the Defense Advisory Committee on Women in the Services (DACOWITS), asserting USFSPA’s adverse effect on women servicemembers.

Larabee had only a few minutes to state her case in DACOWITS’ scheduled public forum. Several DACOWITS members stayed on to discuss the issue with her.

Larabee received public attention at a June 2005 Pentagon town meeting, when she asked Secretary of Defense Donald Rumsfeld to comment on her USFSPA concerns. A divorce judge ordered Larabee to start making payments to her former spouse upon attaining 20 years of service — forcing her to retire prematurely. When Rumsfeld expressed ignorance of the issue, then-Chairman of the Joint Chiefs of Staff Gen. Richard Myers acknowledged problems with the law.

MOAA hopes Larabee’s experience will provide added impetus for legislative action. Since Rep. Cass Ballenger (R-N.C.) left Congress last year, efforts to find a new legislative sponsor have not yet borne fruit.

— Contributors are Col. Steve Strobridge, USAF-Ret., director; Col. Mike Hayden, USAF-Ret.; Col. Lee Lange, USMC-Ret.; Col. Bob Norton, USA-Ret.; Col. Jim Young, USAF-Ret.; Cmdr. René Campos, USN-Ret.; Cmdr. John Class, USN-Ret.; Cynthia Dougherty; and Cass Vreeland, MOAA’s Government Relations Department.